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Tesco prepares probe fightback Tesco denies market stranglehold
(about 12 hours later)
Tesco is set to defend its position in the UK grocery market, by denying that it has too much of a stranglehold over consumer choice. Tesco has denied accusations that it has too much of a stranglehold over the UK grocery market.
An ongoing Competition Commission probe is focusing on local competition. In an open report to the Competition Commission, the UK's largest supermarket said the body's definition of what constituted "local" was flawed.
However in a submission to the industry watchdog, it is expected to criticise the way that "local" has been defined. As the commission examines whether the big supermarkets excessively dominate local shopping, Tesco said the term "local" needed to be redefined.
Tesco confirmed reports its argument would include findings that customers spend up to 30 minutes driving to the supermarket of their choice. It said the body underestimated how far people drove to do their shopping.
This compares to the 10 to 15 minute drive criteria used by the commission. Travel time
'Fiercely competitive' At present, the commission defines local shopping as a person visiting a store that is up to 15 minutes' drive from his or her home.
Tesco drew the conclusion from a research tool which it says can identify the habits of marginal shoppers. Tesco said this travel radius needed to be extended to 30 minutes or more.
As well as finding customers see trips up of up to half an hour as "local", it also said it showed that even small price rises could cause shoppers to switch stores. And far from dominating the UK supermarket sector, it said that 98.6% of shoppers now had access, within 30 minutes drive, to stores run by all five of the largest supermarkets.
This suggested the market was already "fiercely competitive", the submission will say. Tesco added that the grocery market was now "national" rather than local, both because people were willing to drive further to their supermarket of choice, but also because of the growth in people doing their food shopping online.
Tesco's director of corporate and legal affairs, Lucy Neville-Rolfe told the Sunday Telegraph it was hopeful the results would have an impact with the watchdog. Tesco drew its conclusions from a research tool which it says can identify the habits of marginal shoppers.
"We have submitted a serious economic proposition. We hope that the evidence we have submitted will force the commission to review its definition," she said. The Competition Commission is looking into whether Tesco, Sainsbury's, Asda and Morrisons - which control almost 75% of the UK market - are abusing their position by limiting consumer choice.
The commission is probing whether Tesco, Sainsbury's, Asda and Morrisons - which control almost 75% of the UK market are abusing their position by limiting consumer choice.
Firms found to have an anti-competitive hold on the market may be forced to sell off stores.Firms found to have an anti-competitive hold on the market may be forced to sell off stores.